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Submission to the EC Consultation on policy options for market-based measures to reduce the climate change impact from international aviation

Carbon Market Watch, a project by Nature Code, welcomes the opportunity to provide its views to the European Commission on the Consultation on the policy options for market-based measures to reduce the climate change impact from international aviation. While supporting the submission of Transport & Environment, we would like to take the opportunity to provide more detailed comments to the following question of the consultation:

2) Which elements of the “Roadmap for a Global MBM” do you consider a priority, and what would be the optimal timeline for implementation?

Carbon Market Watch considers both, the choice of MBM as well as the level of quantity and quality of offsets, as priority elements of the “Roadmap for a Global MBM”.

Countries still disagree on how such a global MBM would look like. The International Air Transport Association (IATA), a trade association representing the airline industry, recently declared a preference for a 100% offsetting option. It argues that offsetting is administratively simple and easy to implement.

However, Carbon Market Watch believes that of the options on the table, only a cap-and-trade scheme with a stringent cap and a limit on the use of offsets could lead to emissions reductions in the sector.

If ICAO decides on a global MBM and allows for 100% offsetting, demand for offsets from the aviation sector could be in the hundreds of millions. The “Low Carbon Economy Index 2012: Aviation” by Price Waterhouse Coopers[i] projects that the aviation sector will create additional demand for carbon offsets amounting to 100 million carbon offsets yearly.

But offsetting is not a long term solution because it does not lead to emissions reductions in the aviation sector itself but merely compensates these emissions throughout investment in reduction projects elsewhere. Because offsetting delays in-sector reduction, it cannot deliver the large long-term emission cuts required to mitigate aviation sector’s emissions and projected growth in air-traffic. If the offsets are of low quality, climate impacts actually get worse.